| Tom Drolet: Saturday August 9, 2003
I am starting a thread on Vasogen Inc. (VAS.TO on Toronto Canada and VSV on AMEX--USA).
www.vasogen.com
Vasogen is developing its immune modulation therapy (IMT) as a way to reverse chronic inflammation, one of the suspected causes of CHF, and other cardiovascular and neurodegenerative diseases.
Vasogen is a start-up research pharma development company HQ'd in the Toronto Canada area. Below is pasted an article from Canada's National Newspaper (their claim , not mine). It pretty well captures the essence of this medium term play.
I believe they have great prospects and many thearapies in the pipeline that will have major impacts on life extension with major diseases such as CHF, PHD, Psoriasis, Leukemia, Alzheimer's, Parkinson's etc.
I am a private investor and have been in it for about 1 year now (not in the medical field--though I may need this treatment some day--just kidding, I hope).
Not covered in the article below is their extensive patent coverage on their therapies.
Your comments are requested please.
Tom Drolet
"Treatment a potential blockbuster"
By LEONARD ZEHR- of the Globe and Mail
Mississauga 9 Aug 03 Globe and Mail Canadian Newspaper Article
Cindy Markowitz figures her clinical sessions with an experimental treatment for congestive heart failure (CHF) not only gave her a taste of being disease-free, but also had something to do with her recent marriage.
"I would never have had the energy to move from Texas a couple of years ago without those treatments," said the 56-year-old English teacher, who also helps her new husband at their Poland, Ohio, antique business.
Three years ago, Ms. Markowitz was in a clinical trial at Baylor College of Medicine in Houston sponsored by Vasogen Inc. to test its immune modulation therapy (IMT) as a way to reverse chronic inflammation, one of the suspected causes of CHF, and other cardiovascular and neurodegenerative diseases.
"Even though it was a blinded study, it could tell right away that I was in the treatment group," she recalls.
Ms. Markowitz's praise was backed up when Mississauga-based Vasogen reported that CHF patients receiving IMT in the clinical study experienced significantly fewer major hospitalizations and deaths. Specifically, 41 patients had to be hospitalized and seven died in the placebo group, which also received standard heart drugs, compared with 24 hospitalizations and one death in the IMT group.
"These are the only things that mean anything in cardiovascular medicine," said Vasogen president and chief executive officer David Elsley.
The company also cited provements in the quality of life among its patients and no side effects, clearing the way for U.S. Food and Drug Administration approval of a final pivotal study of IMT, which began last month.
"If the company can replicate its Phase II results in the larger Phase III trials, Vasogen could potentially be afforded a multibillion-dollar valuation," Research Capital Corp. analyst Andre Uddin said in a recent report.
So just what is IMT and why is it a potential blockbuster?
"We target chronic inflammation by activating the immune system's physiologic and anti-inflammatory response to apoptosis," Mr. Elsley said.
Apoptosis is the natural process of cell death that occurs in the body. By inducing a sample of cells to become apoptotic, IMT has been shown to reduce the production of so-called cytokine cells in the body's defence-fighting immune system that promote inflammation and increase the production of cytokines that turn off inflammation.
"This is normal physiology," said Mr. Elsley, who along with chief scientist Anthony Bolton founded Vasogen 11 years ago. "We're not going in and blocking this and wiping out that," he said. "We're normalizing the balance of cytokines and that's why we have no side effects."
Vasogen's treatment was created largely as a vehicle to test Mr. Bolton's theory that cell death could be used to trigger an immune response.
"There were plenty of skeptics in the early days if you only look at blood-out, a device and then blood-in," Mr. Elsley said. "But when you think about it in terms of using a patient's cells to create a therapeutic, it makes a lot of sense."
To work its magic, Vasogen withdraws a sample of blood from a patient and treats it with pure medical oxygen and a small amount of ozone to create a test-tube of apoptotic cells, which is readministered in a 30-minute outpatient procedure.
"The science is very elegant in terms of redirecting the immune system to create an anti-inflammatory reaction," said one industry analyst, who declined to be identified. "But it's still a complicated theory for investors to grasp."
Several other analysts agreed. "Opinions on the Street are bipolar," one source said. "One school of thought likes the company because it has a group of very reputable scientists on its advisory board, but other people are suspicious because [the treatment] is just too simple."
Inflammation, of course, is only one piece of the CHF puzzle.
Well-established villains like hypertension and coronary artery disease because of atherosclerosis are also known to damage the heart's ability to pump enough blood to meet the body's demand for oxygen.
But the importance of inflammation is growing as scientists now suspect it is a leading contributor to the build-up of fatty deposits of plaque in arteries.
"Vasogen is targeting the chronic inflammation component of CHF," Mr. Elsley said. "We're not competing with drugs on the market; we're additive to the standard of care."
According to the American Heart Association, CHF is reaching epidemic proportions and is the only major cardiovascular disorder to show a marked increase in incidence over the past 40 years.
In Canada, CHF affects 400,000 people and 25 per cent to 40 per cent die within one year of diagnosis, according to the Heart and Stroke Foundation of Canada.
An estimated five million people in the United States suffer from CHF. It is the No. 1 cause of hospitalization in people over the age of 65 and is implicated in 300,000 annual deaths. On par with the worst types of cancer, the survival rate for CHF is only 50 per cent after five years.
"There are a lot of drugs we're using but there's no definitive treatment for CHF," said Eric Gangbar, a cardiologist in Richmond Hill, Ont. "This is a huge medical problem because people who are being saved from heart attacks are developing heart failure."
While some skeptics question whether cardiologists will embrace a device to treat CHF, Dr. Gangbar said that if it's "covered [by insurance] and effective, there should be no resistance."
Moreover, there are no new treatments for CHF on the horizon, Mr. Elsley said, so if Vasogen's final trials are successful, in 18 to 24 months, "we have a window of opportunity that's five years long."
Vasogen's stock price has doubled since November when the FDA cleared the company to conduct a Phase III trial. It closed at $5.92 on the Toronto Stock Exchange yesterday, giving the company a market value of $364-million.
Last month, the company privately sold about $50-million of new stock to institutional investors, boosting its cash holdings to $75-million, an amount Mr. Elsley predicts will finance the company's clinical program and marketing talks to partner the technology.
The company already has a strategic alliance with Quest Diagnostics Inc. of Teterboro, N.J., the largest clinical lab testing company in the United States, which also participated in Vasogen's latest sale of common shares and is the largest single shareholder.
But Mr. Elsley said Vasogen is in discussions to augment its relationship with Quest. The company wants to team up with a health-care company that has a cardiovascular sales force and that can place IMT in hospitals and cardiologists' offices in addition to Quest's labs.
Negotiations are also under way with potential marketing partners in Europe, he added.
In the Phase III CHF study, Vasogen plans to recruit 2,000 heart patients at 100 clinics in Canada and the United States, with the trial ending when 701 "major events" such as deaths and first hospitalizations have occurred.
"These trials have not been designed to get easy results," said another analyst. "If they get good results, then it's a real drug."
Vasogen also has tested IMT against inflammation associated with psoriasis, leukemia and neurologic diseases, but is focusing on CHF and peripheral arterial disease (PAD), where patients have difficulty walking because atherosclerosis has reduced the bloodflow to the lower extremities.
Clinical testing has already demonstrated a better than 50-per-cent improvement in pain-free treadmill walking distance and a final trial with 500 PAD patients is scheduled for completion in mid-2004.
Vasogen also has taken IMT one step further and created "synthetic apoptotic cells" to target chronic inflammation in the brain.
"The main discovery we've made is that it crosses [the blood barrier into brain] and has anti-inflammatory activity within the brain," Mr. Elsley said.
"This may be a new therapeutic approach . . . to reversing age-related neural deficit," he added, pointing to its possible treatment of diseases like Alzheimer's, Parkinson's, dementia, stroke and amyotrophic lateral sclerosis, or Lou Gehrig's disease.
Using aged animals that would be equivalent to 70-year-old humans, he said the synthetic therapy has improved "memory and learning." Rather than treating collected blood samples, the new therapy is designed to be delivered transdermally with an injector.
The company plans to begin human testing early next year.
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